Truelift’s Director JD Bergeron and Steering Committee Co-Chair Carmen Velasco recently returned from a successful trip to La Paz, Bolivia. Carmen and JD participated in a seminar-workshop called Social Performance Management and Risk Management in Financial Entities. The event was co-sponsored by FINDETO (Finanzas de Todos), the Dutch donor organization Hivos, Dutch social investor Oikocredit, and the Latin American network of networks ForoLACFR.
The main focus of the event was to discuss the implications of a new law (El Ley N° 393) for financial services. The new law was created by the Supervision Authority of Financial Institutions (ASFI) of Bolivia, the chief regulator of both banks and microfinance institutions. Unlike some of its neighbors which have separate regulators for formal financial institutions and for microfinance institutions, Bolivia has one body to serve both. This puts a tremendous burden on ASFI to develop rules that apply to very diverse operations. The new law that puts both a ceiling on credit and a floor on deposits and has already resulted in the closure of certain product lines which were very popular among poor clients.
The challenge now will be for ASFI to listen carefully to the practitioners about the impact of the law on clients, especially those affected by conditions of poverty.
We had excellent side meetings with our first Bolivian Milestone Institution Banco FIE which is a large, mature financial institution which started its existence as a not-for-profit. Our meeting with the MFI CRECER, which recently was awarded Smart Certification, has led to an engagement for a new assessment that we are confident will lead to high recognition within the Pro-Poor Principles.
We hope that Truelift will be part of the solution in Bolivia, providing credibility and validation for those institutions that are accountable to their social goals, and we look forward to engaging with the networks and financial institutions in the near term.
Truelift 